Tick Tok - Time is Running Down

Discussion in 'Accounting & Tax' started by Paul@PAS, 25th Oct, 2019.

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  1. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The 31st October marks a tax office date of importance for 2019 tax returns.
    Its the date by which returns are supposed to have been lodged.

    Those considering access to tax agent extensions to pay and lodge late (as late as May 2020) need to get on the tax agents lodgement programme by NEXT THURSDAY.
     
  2. Archaon

    Archaon Well-Known Member

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    This is for individuals lodging tax returns.

    If you engage a tax agent you don't have a deadline.

    (What was relayed to me by my tax agent)
     
  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Yes you do have a deadline - Read what I posted. As late as May....
     
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    A taxpayer with an existing tax agent can change after the deadline and the extended deadline will rollover to the new tax agent. A taxpayer with no tax agent at present needs to get on the tax agents records BY 31 October. However a taxpayer who ceases to use a tax agent will face loss of the extended lodgement and payment dates when they self lodge (late).

    A late lodger individual after the October deadline pay incur a late lodgement penalty if tax is payable. Generally not if its a refund.

    If a individual taxpayer has tax payable a deferred lodgement using a tax agent can be a excellent strategy to buy time.

    Q : Why do tax agents have such long extended deadlines ?? Because we are busy and cannot possibly accommodate all taxpayers within 4 months of the end of financial year.
     
  5. MRO

    MRO Well-Known Member

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    Got to love the extended payment terms, and interest free period extended to those who choose to use a tax agent. The same payment terms should be offered to all tax payers in my opinion. I understand the deferred lodgment date, but not the different payment dates. Makes me angry and i think i have ranted about this a few times previously.
     
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  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Why ? There is presently $46billion due to the ATO or some $35b if you exclude matters in dispute. :eek: They wont want to extend this further.

    Imposing a debt payment earlier would impose a problem on agent clients. Agent lodgements may often involve more complex, time consuming and strategic issues and amounts too especially when dealing with related entities, groups and the like. The ATO recognise the complex and difficult issues handled by tax agents for their clients which comprise the bulk of taxpayers and the impossibility of them completing the workload in a shorter timespan. Its kinds like asking hospitals to close for 4 months and bring all operations into 8 months....Cant be done. And the system works on the premise that you will calculate the debt at the time of lodgement. This is the foundation of self assessment.

    The PAYG instalment system also seeks to collect taxes over the year when a taxpayer is affected. The tax agent benefit is really limited to an amount that exceeds expected liabilities. Its not a free kick.

    And many taxpayers who lodge through agents also get delayed refunds with no "benefit". They may be unable to lodge earlier for tax planning or spouse or entity related issues..
     
  7. MRO

    MRO Well-Known Member

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    Equity.

    Why do some taxpayers get more time to pay than others. It is clearly unfair.

    The other issues are separate problems:
    - $40b ATO debt. Why is this a just a problem for non tax agent clients.
    - Complex issues. I dont suggest changing lodgement dates as i understand this issue. I am suggesting equality when it comes to payment dates.
    - PAYG. This is based on prior year tax payable. If i have a windfall year the extra 6 months to pay the liability can have significant value.
    - Refund. If you are due a refund then hand over your accounting records in early July to your accountant. I bet they can lodge it well before 31 October.

    I used to work in tax so understand the issues you mention, but simply dont agree with the benefit of extended payment terms for certain taxpayers (generally more wealthy fall into this category)
     
  8. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The wealthy pay more tax. And more medicare and private health and fee gaps too. And more CGT than the poorer taxpayers. Tax isnt meant to be fair. In fact its very premise is the more you earn or make the more you pay and at a increased scale. And some pay nothing. Some even get net refunds of tax. (Self funded retirees and franking credits)

    The ATO has to walk a line between compliance to pull in the $$$ and stuff the economy through a liquidity crisis. Policy tweaks to allow a mass deferral will create a cashflow issue for govt. Treasury would need to borrow. So they maintain the status quo. Treasury budget these things for national cashflow.

    Clive Palmer had a policy of stopping PAYG Instalments. It was the most stupid idea I had heard of. All it would have done is allow a business to spend their tax payments creating a future larger debt. It would have mean the Govt needed to borrow. It never explained where the business would get the cash back from after it was spent. The world biggest payday lending scheme

    I recall when GST came in Howard had concerns about GST and small business cashflows. The first years GST could be deferred into instalments. Helped the cashflow of small businesses. It was a fine line between a deferred debt problem and genuine assistance.
     
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  9. MRO

    MRO Well-Known Member

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    The wealthy part is probably a red herring i shouldnt have raised - it really has nothing to do with timing. Just an observation from my time in tax.

    I get the liquidity concerns you raise but I dont understand why it one group of taxpayers have to deal with this when others dont.

    I think we are going round in circles, I simply cant see how it is fair to give some taxpayers 6 months more to pay than others.

    Extended payment terms are definitely a great marketing tool for tax agents. I have encouraged friends with significant one off tax payments (CGT) is to get on a tax agent list purely for this reason. Unfortunately i have the skills to prepare and lodge my own tax return so i miss out on the 6 months interest free loan.
     
  10. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Meh. As a tax agent yes it is a benefit. Tghe tax payment benefit is NOT 6 months
     
  11. FredBear

    FredBear Well-Known Member

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    Another benefit of being on a tax agent's list and being able to submit later is that if you need to file a tax return to another country, and are claiming credit for tax paid to that country in your Australian return, it is much easier if the tax period (e.g. the calendar year) for that other country is closed.
     
  12. MRO

    MRO Well-Known Member

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    I usually have to pay by around the 21st of November. If i get a 20th of May lodgement date then isnt that 6 months?
     
  13. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    If you self lodge the due payment date may be later than 21st November